CASE SNAPSHOT

In a case of first impression, the Fourth Circuit determined that broker commissions shown to be reasonable and customary parts of settling stock sales constitute "settlement payments" and that the payment of margin interest constitutes "margin payments" under section 546(e) of the Bankruptcy Code such that these types of payments are immune from avoidance and recovery by a bankruptcy trustee.

FACTUAL AND PROCEDURAL BACKGROUND

Under the Bankruptcy Code, a lawsuit to recover avoidable preference payments must be filed prior to the expiration of the statute of limitations. Specifically, such lawsuits must be commenced before the later of 1. two years after the commencement of the case or 2. one year after the appointment or election of the first Trustee, provided that the two-year period has not already expired.

An important qualifier to the discussion about deaccessioning and the Detroit Institute of Arts is that although DIA is a subdivision of the bankruptcy debtor (Detroit), that debtor is not any old commercial entity.  Rather, Detroit is a municipality, and municipal and state debtors are governed by slightly different rules than private parties.

In Sun Capital Partners III, L.P. et al. v. New England Teamsters & Trucking Industry Pension Fund, No. 12-2312, 2013 WL 3814985 (1st Cir. July 24, 2013), the First Circuit held that a private equity fund could be liable for its bankrupt portfolio company’s withdrawal liability imposed under Title IV of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) on the basis of the private equity fund constituting a “trade or business” under ERISA’s controlled group rules.

A bipartisan coalition of senators from the U.S. Senate Committee on Health, Education, Labor, and Pensions has reportedly urged action on a bill (S. 959) that would give the Food and Drug Administration (FDA) additional authority over compounded drugs, which have traditionally been subject to state oversight.

The recentfiling by the City of Detroit for bankruptcy—the largest such municipal filing in history—has brought with it an unexpected art law twist.  Namely: to what extent can, or should the collection of the Detroit Institute of Arts be used to satisfy the city’s creditors.  As one might expect, the differences between what the city can do, what it should do

As with our prior posts on oil and gas leases in bankruptcy (located here and here), this post presents another thorny issue – namely, “Is an oil and gas lease a leas

Chief Judge Loretta A. Preska of the United States District Court for the Southern District of New York affirmed the order confirming SRZ client Quigley Company Inc.’s Chapter 11 reorganization plan on July 30, 2013. As noted in our Alert of June 28, 2013, the plan enables Quigley to emerge from Chapter 11 over the objection of a dissenting creditor class and another group of asbestos personal injury claimants.

Two years ago in Stern v Marshall, the Supreme Court surprised many observers by placing constitutional limits on the jurisdiction of the United States Bankruptcy Courts. The Court, in limiting the ability of a bankruptcy court judge to render a final judgment on a counterclaim against a party who had filed a claim against a debtor’s bankruptcy estate, re-opened separation of powers issues that most bankruptcy practitioners had thought settled since the mid-1980s. While the